January 16, 2015

As I'm sure you're aware, oil prices have cratered, from $85 a year ago to just $46 today. That's nothing. The value of Bitcoin, which peaked in November of 2013 at $1242, has dropped from $847 in January of 2014 to all of $201 today. Heck, it dropped 32% in two days this week! Bitcoin has since bounced, up 19% to $210 yesterday.

Now granted, most people could not care less about Bitcoin. I'm not even sure I care - a fool and his money, blah blah blah. I think the technology used to implement the Bitcoin payment system is fascinating - public ledgers and crypto and block chains will all be game changers. Bitcoins themselves? More of a necessary component to creating a new financial system. Their value was always in Fantasyland and subject to decline every time the compute power to "mine" the Bitcoins got cheaper, which it does every day.

But in Silicon Valley, it's a big deal. Tons of money has been thrown at Bitcoin companies - wallets and exchanges and payment systems. Some of them may even work. Bitcoin is trying to go legit after the messy headlines of the Mt. Gox exchange collapse and thearrest of Ross Ulbricht on charges of dealing drugs via the Silk Road website using Bitcoins as payment. The FBI seized some 144,000 Bitcoins from Silk Road in the raid. Ulbricht's trial is actually going on right now. It's topical!

So anyway, here's where it gets interesting. On Tuesday, the price of one Bitcoin dropped 16% and then another 22% on Wednesday. This is a big deal. Why? Because barely six months ago, in July of 2014, the Feds auctioned off 29,656 of these seized Bitcoins. The winner, beating out 44 other bidders? Silicon Valley icon Tim Draper - he of the venture firm Draper Fisher Jurvetson and the Six Californias initiative and the Draper University of Heroes. The amount of the winning bid was private, but the Bitcoin price was $570 before the auction started and $650 right after. This was covered extensively by the Silicon Valley digerati, Pando Daily, Techcrunch, Re/Code, etc. And in the mainstream media as well.

Let's give Draper the benefit of the doubt and assume he bid $570, which means he forked over to the Feds about $17 million (it's probably higher as he beat 44 other bidders, remember.)

There was another auction of 50,000 Bitcoins in December of 2014 and this time, Draper won only 2,000 Bitcoin, paying, I'd guess, around $370. Barry Silbert, the former CEO of New York firm Second Market and now manager of the Bitcoin Investment Trust, together with a syndicate he put together, "won" the other 48,000 Bitcoin for about $18 million. Congrats.

So Tim Draper invests some $18 million in about 32,000 Bitcoin and today (wait for it...) they're worth a whopping $6.7 million, losing 63% in six months. Don't get me wrong. I like Tim Draper. He's a bit quirky and has an awful taste in ties. Silbert's stake is now worth $10 million - down 43% in a rotation of the moon. My point is less about the epic FAIL of their at the time hyped Bitcoin investing prowess. Jeez, we all make mistakes. No, my beef is more about the coverage.

Sure, Draper lost $11 something million in six months. Fool...money...etc. But my problem is that you wouldn't know any of this from reading the Silicon Valley press, websites or blogs. Nothing. Pando Daily has run 14 stories on Bitcoin in the last month. But type "Tim Draper" into the search box in Pando. Nothing about the price drop. Try it at Techcrunch. Bupkis about the shellacking. My friend Kara Swisher at Re/Code? Zippo. Well, a pointer to an article in the New Statesman. Any mention of Draper or Second Market in that article? Nope. The new Valleywag? Surely old "Fake Steve Jobs" Dan Lyons is all over this? Oops. Not a peep. Venture Beat? Nah.

In fact, the only thing I could find was on Reddit, from five months ago!

Look, this is not some obscure market. Microsoft, Dell, Overstock all take Bitcoin. Expedia and DISH Network will soon take Bitcoin. It's going mainstream or trying hard to. For venture capitalists in Silicon Valley, after investing in the "Ubers of Everything," Bitcoin is one of the top areas of interest. Over $300 million has been invested. Dozens of startups have been funded. Everyone's got one. Some may even work. I hope they do. But after a one third drop in value over two days and a spectacular and quick bloodbath from winning a U.S. Government sponsored auction of Bitcoins, we hear crickets.

Hey, maybe Bitcoin's price is going to $1 million. Maybe not. But when it collapses six months, let alone one month, after a highly visible government auction, you'd think its newsworthy.

Every good journalist knows the mantra: If it bleeds, it ledes. Yet, the silence is deafening.

January 02, 2015

I hate meetings. Everybody does. Yet Nancy Koehn, who teaches at the Harvard Business School, estimates that there will be 11 million meetings taking place today in the United States. Yes, just today. Maybe you’re sitting in a boring one right now, peeking at this on your phone. Not much consolation to know that millions of others are stuck in the same conference-table-shaped circle of hell.

Meetings are supposed to be about discovery and buy-in. That’s it. Someone has decided that a group needs to be informed about some new idea or process or scheme, and by the end of the meeting everyone has supposedly bought into this new vision of the world—one that, if you’re lucky, didn’t come with a 50-slide PowerPoint deck. But meetings instead too often end up being about preening and politicking, and devolve into productivity-robbing, mind-numbing monotony.

Given that the hours taken up by meetings increase when the profit motive is absent—a 2013 study by officebroker.com found that the average office worker spends 16 hours in meetings every week; government workers spend 22 hours a week in meetings—many companies have their own homeopathic cure for meeting madness.

At Amazon, Jeff Bezos starts executive meetings with 30 minutes of silence and has everyone read a carefully crafted six-page report. That’s still a waste of 30 minutes. Some executives at Twitter and Apple set aside Mondays for meetings; the rest of the week is for full days of actual work. BuzzFeed President Jon Steinberg is more lenient; he sets aside Tuesdays and Thursdays as “no meeting” days. Someone I met who runs a music startup bans electronics, restricts meetings to a single topic—and limits them to 10 minutes.

Here’s a trick I’ve seen a few Silicon Valley entrepreneurs employ at board meetings. When an investor or outside board member asks a stupid question, the CEO says “that’s a great question” and then gives the questioner an action item, something like: “OK, can you survey the competition and report back on their capital plans and hiring ratios? Great, let’s keep going.” Eventually the stupid questions dry up and people who ask them may stop coming to the meetings. Perfect.